Author: Edward Price | Published: 26 Feb 2016

The rule will apparently be based on requiring enhanced
record keeping on broker-dealers operating in algorithmic
trading. While automated trading can broadly refer to trading
that doesn’t require human intervention,
algorithmic trading is more precise. Often, the term is used
specifically for automated trading that uses multiple data
sources in determining how and when to execute an order across
multiple markets.

As such, algorithmic trading is a source of concern for
regulators. Based on secret mathematical formulas, and speedy
computerised decisions, it’s notoriously difficult
to understand. Cracking it open will probably entail a closer
look at proprietary data, which to the traders who own it is
disquieting.

But, if for no other reason than the market’s
size, the imperative to...